Increase in Discount Rate Forecast

Albert Wojnilower, managing director and senior adviser at First Boston Corp., predicted Monday that the U.S. discount rate will rise before President-elect Bush is inaugurated.

Wojnilower told a meeting of insurance executives that the discount rate--the rate the Federal Reserve charges on loans to financial institutions--will be lifted from its current 6.5% level. The rate was last increased Aug. 9, when it rose half a point to 6.5%.

His comments add weight to a widespread view that continued strong growth in the economy and fears of accelerating inflation will cause the Fed to tighten credit.

Wojnilower also predicted that the economy will go into a downturn in the second half of 1990 or early 1991, but that the recession will be mild.